Factors Influencing Business Environment

The assignment delves into the concept of macroenvironmental factors influencing business decisions. It emphasizes the use of PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis to understand these external forces. The analysis draws upon various academic sources, including research papers and books, to illustrate how businesses can effectively navigate and adapt to the changing macroenvironment. Real-world examples are incorporated to provide practical applications of the concepts discussed.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Covered in PPT......................................................................................................................1
P2 Covered in PPT......................................................................................................................1
P3 Relationship between different organizational functions and its link to organization
objectives.....................................................................................................................................1
TASK 2............................................................................................................................................2
P4 Positive and negative impact of macro environment upon business operations....................2
P5 Internal and external analysis of organisation by identifying its strength and weakness......5
P6 Comparison between SWOT and PESTLE analysis.............................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8

INTRODUCTION
Environment is a combination of internal and external factors which have a greater
impact on business operation directly and indirectly because all the resources are acquired by
surrounding only. Basically business environment is cluster of two words “business” means
commercial activity that is exchange of goods and services across national boundaries whereas
“environment” means macro surrounding from where particular firm may acquire resources to
run their business smoothly. This report is based on Nestle, one of famous British multinational
brand by having its branches across national boundaries. Main motive of this assignment is to
highlight purpose of various enterprises for example public, private and voluntary available at
marketplace with different aims. Apart from this, it also throw some lights on analysis of
external and internal environment as well as comparison between both the term for explaining its
importance for nestle. At last it also covers strength and weakness of micro and macro
surrounding.
TASK 1
P1 Covered in PPT
P2 Covered in PPT
P3 Relationship between different organizational functions and its link to organization objectives
In an association, there are assortment number of capacities are worked. There are several
number of capacities are occurring which incorporates marketing, finance, human asset and
along with this IT. Administration need to take this thing in their record and need to dispense
spending plan to every office with the goal that entire undertaking complete in a powerful way.
Specialist need to plan goals on which entire office will play out their obligations and perform
them well to accomplish such targets (Boons and Lüdeke-Freund, 2013).
Moreover, hierarchical structure needs to take after a straightforward structure so every
representative can speak with each other appropriately. Each capacity of firm needs to set their
own particular targets which need to get accomplish in least era. Certain number of capacities
which are occurring in an organization are:
Production or operational department: One of a noteworthy capacity in an association is
generation who produce products. They need to create such kind of products which fulfil their
1

clients and empower them to achieve ideal level. Likewise they need to demonstrate some worry
towards their outlining of items which encourage to draw in target. Nestle need to take after a
basic hierarchical structure where high expert chiefs can without much of a stretch speak with
operational office directors (Chang, Hughes and Hotho, 2011). Their general target is to deliver
great items which have an ability to fulfil clients.
Human resource: Nestle needs to enrol such workers which help them in giving quality
administrations to their clients. HR supervisors need to utilize proper methodologies through
which they can choose such number of labours who can deliver fantastic items. The primary
target of HR division is to serve top notch administrations to their clients.
Finance: The blood of each business is fund, which is required to do all exercises in a
successful way. legitimate accessibility of store is should and back division need to designate
appropriate cash for doing exercises in a suitable way (Demil, and Lecocq, 2010).
Sales and marketing: For offering out the items and products, organization need to
utilize compelling offering and showcasing idea. This empower them in offering quality items to
target number of shoppers. Showcasing capacity is a fundamental part since it prompts
encourage an appropriate correspondence process amongst buyer and organization. Likewise,
they need to decide about client's request and needs so they can pass data to top expert to make
products which are as indicated by their purchasers. Nestle most recent couple of years' benefit
connotes that their advertising office is utilizing forceful systems of advancement (Edquist,
2010).
Nestle is utilizing base up approach in which they incorporate their operational level
workers in account and set up their techniques by utilizing their view focuses. This system is
useful for them in light of the fact that by counselling this approach their employees' requests are
additionally getting fulfilled and they deliver with more will. Then again, Nestle is not utilizing
this technique thus their labours don't repair at one place for long time.
TASK 2
P4 Positive and negative impact of macro environment upon business operations
The six large scale condition factors which influences the business that is PESTLE its
incorporate political, economical, social, technological, legal as well as environmental.
2

Political factor: Nestle is working in various nations everywhere throughout the world and face
many difficulties (Grimpe, and Kaiser, 2010). A portion of the item are not permitted to disperse
in different nations because of different reasons. Diverse political changes are came in the
organization, for example, they give their item at a higher costs so a large portion of the general
population are not bear the cost of this Nestle mark. There are a few principles and control set by
government so as indicated by that guidelines and direction Nestle have worked. Nestle ought to
dealt with political powers, for example, tax assessment arrangement ,send out import strategy
and so on.
They are acquainted their sterile item with the administration bodies.
1. Positive Impact: The tenets and control of government are set to expel the
preference from association and give break even with chance to all workers.
2. Negative Impact: Sometimes the expense rate and extract rate are high as set by
administrative bodies which go about as a noteworthy obstacle of Nestle.
Economical factor: Different nations have distinctive improvement in term of economy. Nestle
has built up their own financial arrangements for various market fragment. They build up the
evaluating choice in learning of swelling rate and purchaser obtaining power. Nestle has
contributing an enormous for the advantageous of economy (Helms, and Nixon, 2010).
 Positive Impact: If the organization decrease their tax collection strategy then
it can be impact fare and import of merchandise and ventures so it can be
valuable for Nestle organization.
 Negative Impact: If there is changes of remote conversion standard then a host
organization get overwhelming misfortunes.
Social factor: Nestle give their particular item agreeing their way of life norms,religion. They
focus the buyer conduct ,taste and convictions. The item has been delivered so as to support their
quality (Marketing and business environment, 2014). Qualities and standards are the solid
conviction of shopper which are made by the organization.
 Positive Impact: Designing of new products are made by organization to the catch of
numerous clients so the organization gain a gigantic benefits.
 Negative Impact: Sometimes there are many substitute accessible so that there is diminish
in deals which impacts achievement of Nestle.
3

Technological Factor: There are numerous mechanical factor which gives the chances to the
advancement of new products and change for existing items (Hoang, and Rothaermel, 2010).
The innovation has made the development in web with the goal that individuals pick the
numerous assortments of item. Nestle are as of now beginning the craft of innovation to deliver
the imaginative item. These new changing components gives another road for deals obtaining
and promoting and these are essential when a more youthful customers at the top of the priority
list.
 Positive Impact: The positive effect is that workers can finish their assignment in least
time with productively and viably for the fulfilment their destinations.
 Negative Impact: Illiterate and incompetent specialists are very little mindful of apparatus
and hardware in view of their new innovation and advancement so this can be impacts of
Nestle.
Legal factor: There are many work law which are set by administrative bodies. Nestle needs to
confront the base work compensation act (Jung, Kim and An, 2011). The earth law is to held to
ensure the earth of organization and make the item condition amicable. Some lawful elements
which influences this association, for example, vast no of low paid representatives were worked.
There are some authoritative issues like equivalent open doors which are given in working
environment and in enrolment and determination process.
 Positive Impact: The positive effect is that to safeguard nature from harmful and
dangerous item which may causes an ailments which impacts the life of person.
 Negative Impact: Sometime the limitations are reported by the administrative bodies in
term of import fare of products at universal level because of changes in enactment
(Kolios, and Read, 2013).
Environmental Factor: Some ecological elements which are influenced the Nestle that is their
business volume were poor because of surges. Nestle has created some human services items and
powders which have awesome request in topical nations. The adjustments in climate are impact
the decisions of client brands.
 Positive Impact: This is most essential factor for each business association .It gives an
assets like land ,building.
Negative Impact: Deficiency of assets which impacts the achievement of Nestle. Its influences
the general public (Kuratko, Hornsby and Covin, 2014).
4

P5 Internal and external analysis of organisation by identifying its strength and weakness
All the firm have large various numbers of activities which take place at the at office and
it is the responsibility of the people working over their to perform it in proper manner so that it
can be effective for the business. The management of the company has to use appropriate
methods, tools and techniques which can enable them so that they can overcome form some sort
of things (Lovejoy and Saxton, 2012). The business environment is been comprised of the
several factors and that would affect the business in bad manner. The managers of a company
have to analyse all the activities such as opportunities and threats which use to taken place in the
environment, if it is been consulted properly and carried out in correct manner then the
organisation will be able to get appropriate growth in firm. And if the manager of a company has
to formulate the effective strategies they have to conduct a SWOT analysis, that will help them
in producing proper frame work of the process which has to develop in firm. Nestle company
should know about their strength weakness, opportunities and threats so that they can use their
strength to overcome their weakness and make proper use of opportunities to enable the threats
which comes in their organisation (Miller, Yablonovitch and Kurtz, 2012). Manager of nestle
should analyse their strength properly and link that with the organisational objectives.
Strength Nestle is gaining good profits from last few years and that defines that their
financial condition is good and this can be one of their strength, to have
good financial condition is very beneficial for the company.
To have good brand image in market can also be seen as strength and nestle
is having very nice brand image in market area and even they are from
many years (Milner and Tingley, 2011).
Weakness Generally the weakness can be occurred by some of the sources in which
the company is backward then other business. And weakness tells that at
what areas does the company should focus more and make them their
strength too (Molly, Laveren and Deloof, 2010). Nestle is having a good
image among people, and to sustain that they have to prepare a proper
guideline for it.
Some of the weaknesses of nestle is that
they are dealing with a products such as coffee and chocolates and there is
no variation in it and that might be a weakness for them if they will use
5

new technologies then it can be solved.
To use old technology for a long time become problematic, so the company
should be updated with the new and upgraded technologies, and to adopt
them easily the management should manage the finance of company
properly (Pestle and Colvard, 2012).
They have to create more new products according to the requirements of
the customers.
Opportunities Opportunity means a chance which a company gets, the chance which get
to them has to be used properly and take them in use so that they can be
able to achieve something good. The organisational environment should
grab all the chances which they get according to the requirements. Nestle
should grab all the chances which they get as that will help them in earning
more profits (Pizam, 2010).
The opportunities which nestle have like
now there are various sources by which they can perform research in the
market so that they get proper information and produce products according
to the requirements.
Threats Threat is that which can create any problem to the company and that even
can affect the company with any sources and ways. That has be analysed
and treated otherwise it can create heavy loss in the company.
The threats which company is facing are :
major treat of nestle is that increasing number of competitors in the market
with new products and services (Raza and Hanif, 2013). This can affect the
company very badly
Even now a days there are lots of substitute products are available in
market so people switch to the substitute products quickly, that affects the
profit of the company.
6

P6 Comparison between SWOT and PESTLE analysis
The firm use to get affected by the external factors and that is the main duty of manager
to analyse some of that things and the factors which use to effect the business mostly. If once it is
been analysed all of that things the managers can be able to frame an appropriate guidelines so
that the work can be done in proper manner and in systematic way (Sainsbury and Benton,
2011). While performing the SWOT analysis in the company by managers then it will be
beneficial for them to identify the required improvements which has to be done in the company.
The external factors of the business is the government, technologies. Economical, environment
condition of the company and the society. If all the elements will support the enterprise then the
form of working will get improved and that will help in sustaining in market for a long time.
Nestle should build their internal as well external elements better so that it will be beneficial for
the company to frame their strategies (Schwenter, 2011).
Strength- It is very essential for company as strength use to provide help to the firm to sustain in
market for a long run and provide advantage to compete with competitive market. Nestle should
use their strengths in correct and proper manner so that they can formulate their strategies which
can be helpful for them in any situation (Self and Wu, 2012).
The political instability use to affect the working of the business and on their strength too, if the
government bodies use to formulate new rules and policies then it has to be adopted and make
changes in the business by the management and sometime that rules and policies are not in
favour of the company and to adopt new policies in short time in little difficult.
Change in technologies can also impact nestle, if they will not adopt new technologies then
company can get affected with it as people wants always something new, so the strength is that
they adopts new technologies.
The management of a company has to use the culture of the society in which they are running
their business, they should focus on the needs an d wants so that they can provide betterment for
the society. This can be their strength (Srdjevic, Bajcetic and Srdjevic, 2012).
Weakness- when the company is not performing their duties and responsibilities properly then it
can create problems for them and that can became their weakness. And even with that they can
face heavy loss. It is the responsibility of a management to analyse the weakness of the company
and to work on it properly.
7

Legal factors can affect the company as the company or any of the employees are not working in
a legal way then it can create problem and that can impact on the companies brand image (Macro
environmental forces, 2017).
As technologies are getting changed according to time that affects the business. As if the
company will not be able to adopt the upgraded technologies then they cant be able to produce
good and new products. And they cant even earn more profits.
The strength and weakness which the company is having has to be utilized is appropriate manner
so that they can be able to deal with the external factors properly (Business and the environment,
2017). The management should know about all the things and adopt those techniques which are
beneficial for them to get success for a long time period. Nestle should maintain their structure in
proper manner to attain beneficial. It is the main duty of management to analyse and maintain the
internal and external environment and focus on all the elements so that they can be able to
manage all the things properly.
CONCLUSION
In this report it is been analysed that the environment of a business as to be analysed and
get proper information about the organisational environment. The size and scope of organisation
is been maintained in the report by which it provides information to know about different sectors
of organisation scope and size. There are various department in the organisation which has
interrelation between them which has to be taken in care about company. It is essential for the
company to focus on its environment and the surrounding properly to maintain it and to achieve
the required things. Nestle has to focus on all the things properly.
8

REFERENCES
Books and Journals
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-
art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-19.
Chang, Y.Y., Hughes, M. and Hotho, S., 2011. Internal and external antecedents of SMEs'
innovation ambidexterity outcomes. Management Decision. 49(10). pp.1658-1676.
Demil, B. and Lecocq, X., 2010. Business model evolution: in search of dynamic consistency.
Long range planning. 43(2). pp.227-246.
Edquist, C., 2010. Systems of innovation perspectives and challenges. African Journal of
Science, Technology, Innovation and Development. 2(3). pp.14-45.
Grimpe, C. and Kaiser, U., 2010. Balancing internal and external knowledge acquisition: the
gains and pains from R&D outsourcing. Journal of management studies. 47(8). pp.1483-
1509.
Helms, M.M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review of
academic research from the last decade. Journal of strategy and management. 3(3).
pp.215-251.
Hoang, H.A. and Rothaermel, F.T., 2010. Leveraging internal and external experience:
exploration, exploitation, and R&D project performance. Strategic Management Journal.
31(7). pp.734- 758.
Jung, H.S., Kim, Y. and An, J.A., 2011. Effects of the Internal and External Factors of Small and
Mediumsized Corporations on Green Management Performances through the
Establishment and Utilization of Information Systems and Building Relationships for
Information and Knowledge.
Kolios, A. and Read, G., 2013. A political, economic, social, technology, legal and
environmental (PESTLE) approach for risk identification of the tidal industry in the
United Kingdom. Energies. 6(10). pp.5023-5045.
Kuratko, D.F., Hornsby, J.S. and Covin, J.G., 2014. Diagnosing a firm's internal environment for
corporate entrepreneurship. Business Horizons. 57(1). pp.37-47.
Lovejoy, K. and Saxton, G.D., 2012. Information, community, and action: How nonprofit
organizations use social media. Journal of Computer‐Mediated Communication. 17(3).
pp.337-353.
Miller, O.D., Yablonovitch, E. and Kurtz, S.R., 2012. Strong internal and external luminescence
as solar cells approach the Shockley–Queisser limit. IEEE Journal of Photovoltaics. 2(3).
pp.303-311.
9

Milner, H. V. and Tingley, D. H., 2011. Who supports global economic engagement? The
sources of preferences in American foreign economic policy. International Organization.
65(01). pp. 37-68.
Molly, V., Laveren, E. and Deloof, M., 2010. Family business succession and its impact on
financial structure and performance. Family Business Review. 23(2). pp.131-147.
Pestle, W.J. and Colvard, M., 2012. Bone collagen preservation in the tropics: a case study from
ancient Puerto Rico. Journal of Archaeological Science. 39(7). pp.2079-2090.
Pizam, A., 2010. International Encyclopedia of Hospitality Management. Butterworth-
Heinemann.
Raza, S.A. and Hanif, N., 2013. Factors affecting internet banking adoption among internal and
external customers: a case of Pakistan. International Journal of Electronic Finance. 7(1).
pp.82-96.
Sainsbury, M. and Benton, T., 2011. Designing a formative e‐assessment: Latent class analysis of
early reading skills. British Journal of Educational Technology. 42(3). pp.500-514.
Schwenter, S., 2011. Variationist approaches to Spanish morphosyntax: Internal and external
factors. The handbook of Hispanic sociolinguistics. pp.123-147.
Self, R.L. and Wu, W.H., 2012. Rapid qualitative analysis of phthalates added to food and
nutraceutical products by direct analysis in real time/orbitrap mass spectrometry. Food
Control. 25(1). pp.13-16.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: A case study of reconstructing a
water intake structure. Water resources management. 26(12). pp.3379-3393.
Online
Business and the environment. 2017. [Online]. Available through:
<https://www.imperial.ac.uk/environmental-policy/msc/msc-environmental-technology/
options/business-and-the-environment/>. [Accessed 18th August on 2017].
Macro environmental forces. 2017. [Online]. Available
through:<http://www.referenceforbusiness.com/management/Log-Mar/Macroenvironment
al-Forces.html>. [Accessed on 18th August 2017].
Marketing and business environment 2014. [Online]. Available through:
<http://businesscasestudies.co.uk/business-theory/marketing/marketing-and-the-business-
environment.html#axzz4UbKkZn17>. [Accessed on 18th August 2017]
10